Gold Prices Settle Lower (Update 1)

NEW YORK ( TheStreet) -- Gold prices closed lower during a choppy session on Thursday after European Central Bank President Mario Draghi commented on the economic situation in Europe.

Gold for April delivery slid $7.50 to settle at $1,671.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,683.90 and as low as $1,663.40 an ounce, while the spot price was falling $5.40, according to Kitco's gold index.

Gold prices sold off by more than $10 shortly after Draghi's remarks as the central bank chief said that the exchange rate was important for growth and price stability -- a nod that an appreciation in the euro could hurt exports and become an inflation risk.

Chicago Fed President Charles Evans told CNBC on Thursday morning that quantitative easing may need to continue for the whole year in 2013. Gold investors raised concerns last month when the Federal Reserve announced that policy-making members announced confliction as to when to end the bank's monetary stimulus programs.

The Labor Department reported initial jobless claims for the week of Jan. 26 of 366,000, which was down 5,000 from the previous week's upwardly revised 371,000 claims. Economists expected new claims of 360,000. The four-week moving average dropped in the latest report to 350,000 claims, which was down 2,250 from the prior tally. Gold investors continue to monitor labor market trends as the Fed's low-interest-rate policy is pegged to an unemployment rate target of 6.5%. Any end in low rates could signal an end to very accommodative policies by the central bank.

Silver prices for March delivery dipped 47 cents to $31.40 an ounce, while the U.S. dollar index was jumping 0.59% to $80.22.

Gold's price rally has been a product of demand-side economics, and there is still a considerable amount of interest in gold that is not fully tapped, according to Tom Brady, chief economist at Newmont Mining.